CALGARY, ALBERTA--(CCNMatthews - Nov. 17, 2004) - Enbridge Inc. (TSX:ENB) (NYSE:ENB) today announced that its wholly-owned U.S. subsidiary, Enbridge (U.S.) Inc., will acquire 100% of Shell Gas Transmission, LLC (SGT) from Shell US Gas & Power LLC (Shell) for US$613 million, plus associated working capital. SGT has ownership interests in 11 transmission and gathering pipelines in five major pipeline corridors that currently move approximately 3 bcf/d and transport approximately half of all deepwater natural gas production in the Gulf of Mexico. Closing of the purchase is anticipated to occur by year-end, subject to receipt of regulatory approvals and customary closing conditions.
"The SGT acquisition is an excellent one for Enbridge," said Patrick D. Daniel, President & Chief Executive Officer of Enbridge. "It immediately establishes Enbridge as a major natural gas transporter in the Gulf - one of the key regions for continental supply growth and an area with significant potential for undiscovered natural gas reserves. It provides us with a new growth platform with good upside potential, and is financially and strategically attractive. The acquisition is consistent with our strategies of increasing our North American natural gas transmission assets, and of focusing on fee-based energy transportation and service infrastructure. We expect to fund the acquisition with existing liquidity and credit capacity, and we expect that it will be accretive to earnings by up to Cdn$0.14 per share in 2005."
"This acquisition puts Enbridge close to significant deepwater gas prospects and positions us to capture a large portion of this incremental deep Gulf supply," added Dan C. Tutcher, Enbridge Group Vice President, Transportation South. "We'll also be well situated to transport potential volumes from LNG re-gasification facilities proposed in the Gulf. Overall, with their broad geographic footprint and proximity to recent discoveries and new exploratory plays, we anticipate these pipelines will continue to deliver solid performance and offer tremendous opportunities for organic growth. We're fortunate to be adding members of SGT's high-quality management team and staff to our Houston-based team, so that the commercial and operational oversight of these systems continues to bring Enbridge and its customers the value, reliability and growth anticipated."
The systems included in this transaction have a combined landed capacity of approximately 4.7 bcf/d and comprise approximately 1,482 miles (2380 kilometres) of pipeline. The SGT system includes ownership in:
- five natural gas transmission systems regulated by the Federal Energy Regulatory Commission and located in the Louisiana and Mississippi offshore waters of the Gulf of Mexico: these transmission systems include SGT's ownership interests in the Stingray (50%), Garden Banks (80%), Nautilus (50%), Mississippi Canyon (100%) and Destin (33 1/3%) pipelines; and
- six connected deepwater gathering systems including new lines and extensions currently under construction and scheduled to be in service in 2005 and 2006: these gathering systems are supported by dedicated reserves under existing life-of-lease contracts with major oil companies and large independent producers.
Enbridge will assume SGT's role as commercial manager and field operator for most of the pipeline systems.
Enbridge will hold a conference call for all interested parties at 7 a.m. Mountain time (9 a.m. Eastern time) today to discuss the SGT acquisition. The call can be accessed at 1-877-295-2825 and will be webcast live at www.enbridge.com/investor. A replay will be available shortly thereafter at 1-800-408-3053 using the access code 3115228#.
A fact sheet and map of the SGT system is available at www.enbridge.com.
Enbridge Inc. is a leader in energy transportation and distribution in North America and internationally. As a transporter of energy, Enbridge operates, in Canada and the United States, the world's longest crude oil and liquids transportation system. The Company also has international operations and a growing involvement in the natural gas transmission and midstream businesses. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company, and provides distribution services in Ontario, Quebec, New Brunswick and New York State. Enbridge employs approximately 4,000 people, primarily in Canada, the United States and South America. Enbridge's common shares trade on the Toronto Stock Exchange in Canada and on the New York Stock Exchange in the United States under the symbol ENB. Information about Enbridge is available on the Company's web site at www.enbridge.com.
Certain information provided in this news release constitutes forward-looking statements. The words "anticipate", "expect", "project", "estimate", "forecast" and similar expressions are intended to identify such forward-looking statements. Although Enbridge believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a variety of risks and uncertainties pertaining to operating performance, regulatory parameters, weather, economic conditions and commodity prices. You can find a discussion of those risks and uncertainties in our Canadian securities filings and American SEC filings. While Enbridge makes these forward-looking statements in good faith, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. Enbridge assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
For more information please contact:
Enbridge Inc.
Jim Rennie
Media
(403) 231-3931
Email: jim.rennie@enbridge.com
or
Enbridge Inc.
Colin Gruending
Investment Community
(403) 231-5919
Email: colin.gruending@enbridge.com
Website: www.enbridge.com